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What to do if Bush tax cuts expire

Prepare for the marriage penalty
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Prepare for the marriage penalty

The marriage penalty, a quirk of the tax code under which a couple filing a joint return pays more tax than if they each filed individual 1040s, will return next year.

This so-called marriage tax was largely alleviated by the soon-to-expire tax laws. They gave joint filers a standard deduction twice that of a single taxpayer. Also, the 15 percent tax bracket for couples was made twice that of a single filer.

Essentially, much of a husband and wife's income is now treated as if they were filing as single taxpayers. That equity will be erased if the law is allowed to sunset. However, in an election year, most candidates don't want to seem unfriendly to families, so this tax fix has a decent shot at being continued.

But just in case, you might want to speed up your wedding ceremony. Your filing status is determined by your marital status at the end of a tax year. If you were single for 364 days, but wed Dec. 31, the IRS considers you married for the full year.

If you marry in 2010, you'll get at least get one year without paying a marriage tax penalty.


 

 

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